LINCOLN — State lawmakers want to hear what Nebraskans think of paying for public schools more with income and sales taxes and less with property taxes.
The Legislature's Education Committee decided Monday that giving school districts and the state different funding options merits further consideration, during a meeting at the State Capitol.
Committee members will seek input on the idea and others during public hearings next month in Hastings, McCook, Dunning, Omaha, Crete and Macy. Sen. Kate Sullivan of Cedar Rapids, committee chairwoman, stressed that the committee has not endorsed any ideas at this stage.
The hearings are a key part of the committee's interim study on changes to funding of K-12 schools in Nebraska. The committee is working to develop possible proposals by year's end.
Property taxes are the top revenue source for Nebraska's 249 school districts, but the state provides nearly $1 billion in annual aid payments to schools. The aid dollars consist largely of state sales and income tax revenue.
“The majority of comments and concerns I hear are directed at property taxes,” said Sen. Jim Scheer of Norfolk, a member of the committee.
In an effort to reduce the reliance on property taxes, some committee members have floated the idea of allowing school districts to use local option sales tax and income tax funding.
Details on how the school sales and income taxes would be set would have to be worked out. Some senators called such an approach a “tax shift” while others said it could even be described as creating new taxes, which would make it a tough sell politically.
“The implementation issue will be big,” said Sen. Bill Avery, a committee member from Lincoln.
The committee also decided Monday to gather public reaction to the idea of setting aside state aid money one year in advance. Under the current system, the Legislature does not set state aid until a few months before the school year begins, which makes planning difficult for local elected officials and school administrators.
In addition, the committee will seek input on changing how a school's needs are determined under the complex state aid formula. The idea would be to distribute base payments for each school district, for each student and for extra expenses related to poverty, special education, transportation and English proficiency.
The goal would be to simplify the formula in a way that still accounts for the differences in rural and urban school districts across the state.
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